Pandemic brings relief to squeezed tenants

THE pandemic has sent rents tumbling, shaving an average of €40 off tenants’ monthly bills, an official report shows.

Rents were falling by 3.3% in June, with rent inflation outside Dublin dropping ‘sharply’, according to the Residential Tenancies Board.

But despite the drop, the RTB has added another district to its Rent Pressure Zone list.

Bandon and Kinsale, Co. Cork, become the 54th area to be added to the list since it started in Christmas 2016.

In Rent Pressure Zones, landlords are restricted to rent rises of 4% a year. However, before the lockdown the national average rent was €1,231, which was up by €64 from €1,167 on 12 months earlier, a steep rise of 5.4%.

In Dublin, rents were up €88 a month to €1,735 – a sharp rise of 5.3%.

RTB director Padraig McGoldrick said: ‘It’s clear from the analysis since the pandemic began that the rental market has been immediately impacted by lockdown, with prices falling by 3.3% nationally in June compared to the previous year.

‘Dublin experienced the most immediate reduction, however, as we went further into lockdown, we saw price growth outside of Dublin gradually begin to decline at a greater level.’

Future rents will be impacted by high unemployment, according to Economic and Social Research Institute Senior Research Officer Conor O’Toole, who co-wrote the report. ‘It is very likely they will mirror developments in incomes and unemployment of households.

‘The spread of Covid-19 and the resulting lockdown is likely to impact all facets of the Irish economy. This includes prices in the rental market which have been rising rapidly in recent years due to excess demand and strong economic growth,’ he said.

During lockdown, there was a steep drop in tenancies registered with the RTB, falling from 7,000 in March to less than 4,000 by April.

Pat Davitt, IPAV chief executive, said what happens will be dictated by a number of factors – the shape of the recovery; how long the pandemic remains with us without a vaccine and the extent to which new work practices will emerge from Covid-19.

The RTB’s rent index for the first quarter of 2020 reveals that there has been a 5.3% increase in Dublin and, more worryingly, a 10.5% increase in Greater Dublin.

Homeless charity Threshold chief John McCafferty said: ‘The national increase is a cause of worry, in particular the 10.5% increase in the Greater Dublin Area outside of the city. We need to see a sustained drop in rents for the rental sector to become a viable, affordable tenure of choice.’